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Question : 15
Total: 49
Giving valid reasons, state whether the following statements are true or false :
(i) Dividend received from investment abroad is recorded on the credit side of the capital account.
(ii) Depreciation of the Indian Currency will lead to promotion of Indian exports.
(i) Dividend received from investment abroad is recorded on the credit side of the capital account.
(ii) Depreciation of the Indian Currency will lead to promotion of Indian exports.
Solution:
(i) False
Reason: Dividend received from investment abroad is a factor income from abroad and will be recorded on credit side of the current account.
(ii) True
Reason: Depreciation of Indian currency leads to increase in purchasing power of foreign currency. Domestically produced goods become cheaper for foreign country. It leads to increase in Indian exports.
Reason: Dividend received from investment abroad is a factor income from abroad and will be recorded on credit side of the current account.
(ii) True
Reason: Depreciation of Indian currency leads to increase in purchasing power of foreign currency. Domestically produced goods become cheaper for foreign country. It leads to increase in Indian exports.
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